"Trump's Economic Advisor" Myron's Rebellion: "Fed Should Cut Rates by 2 Percentage Points"

Myron Calls for Aggressive Rate Cuts
in First Public Speech Since Taking Office

Stephen Myron, a member of the U.S. Federal Reserve Board often referred to as "Trump's economic advisor," has argued that the benchmark interest rate should be lowered by 2 percentage points. In his first public speech just one week after taking office, his bold call for a significant rate cut has sparked controversy.

On September 22 (local time), during a speech at the Economic Club of New York, Myron stated, "The bottom line is that monetary policy has entered a restrictive zone," adding, "Leaving short-term interest rates about 2 percentage points higher than the appropriate level is unnecessarily risking layoffs and a rise in the unemployment rate."

He pointed out that tariffs, immigration restrictions, and tax policies have lowered the neutral interest rate, and insisted that rates need to be cut much further to prevent economic damage. The neutral interest rate refers to the theoretical level of interest that neither overheats nor depresses the economy.

Myron emphasized, "The Fed has been entrusted with the important goal of promoting price stability for the benefit of all American households and businesses, and I am doing my utmost to sustainably bring inflation back to 2%." However, he reiterated, "Maintaining policy at an excessively restrictive level poses significant risks to the Fed's employment mandate."

Myron was nominated by President Donald Trump to replace former Fed Board member Adriana Kugler, who recently resigned unexpectedly. Known as Trump's economic advisor and a consistent advocate for rate cuts since the start of Trump's second term, Myron previously served as chairman of the White House Council of Economic Advisers (CEA). At his first Federal Open Market Committee (FOMC) meeting on September 17, he called for a substantial rate cut. While the Fed lowered the benchmark rate by 0.25 percentage points to a range of 4.0% to 4.25%, Myron was the sole dissenter, demanding a 0.5 percentage point cut. Regarding the year-end rate outlook, while other members anticipated an additional 0.5 percentage point cut, Myron projected a cut as large as 1.25 percentage points.

Myron made it clear that he will continue to advocate for the need for large-scale rate cuts going forward.

He stated, "Until my view changes, I will continue to advocate for it. If that means dissenting, I will continue to dissent. I will not vote for something I do not believe in simply to create the illusion of consensus where none exists."

Myron's term lasts until January next year, completing the remainder of former Board member Kugler's term. It has not yet been determined whether he will be appointed as a new board member after that. If he serves only the remainder of the term, he will return to his current leave of absence from the position of chairman of the White House CEA. In response, the Democratic Party has criticized the appointment as pandering to President Trump, arguing that the independence of the Fed is being undermined.

This content was produced with the assistance of AI translation services.